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The World's Largest 500 Asset Managers

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The World's Largest 500 Asset Managers The world’s largest 500 asset managers Thinking Ahead Institute and Pensions & Investments joint research © 2018 Willis Towers Watson. All rights reserved. CONTENTS 3 EXECUTIVE SUMMARY 7 24 31 35 SECTION 1 SECTION 2 SECTION 3 SECTION 4 Total value of assets Analysis of the Passive Manager insights on largest 20 asset management the industry managers 37 48 SECTION 5 SECTION 6 Complete TAI /P&I Definitions and 500 ranking footnotes 52 SECTION 7 Thinking Ahead Group research team Limitations of reliance and contact details © 2018 Willis Towers Watson. All rights reserved. 2 EXECUTIVE SUMMARY © 2018 Willis Towers Watson. All rights reserved. 3 EXECUTIVE SUMMARY Executive summary: the numbers . Total discretionary Assets under Management (AUM) of the 500 managers included in the ranking amounted to US$ 93.8 trillion at Assets under the end of 2017, up 15.6% from the end of 2016. Median AUM was Management grew at US$ 43.9 billion in 2017, up from US$ 38.6 billion last year. their fastest rate since . BlackRock has retained its position as the largest asset manager in 2009 the ranking since 2009. For the fourth consecutive year, Vanguard and State Street complete the top three. BlackRock remained in the top spot, . AUM growth by region ranged from 9.6% in the U.K. to 15.9% for the increasing their AUM rest of the world category. North America and Europe grew at 15.1% and 15.8% respectively while Japan grew at 12.6%. by 22.2% in 2017 . Participation of managers from developing countries remained the AUM for North America same as in 2016. However, their assets under management grew to reached US$ 54.5 US$ 3.5 trillion (14.1%). trillion at the end of 2017. Its participation in the total AUM decreased slightly, to 58.1% © 2018 Willis Towers Watson. All rights reserved. 4 EXECUTIVE SUMMARY Executive summary: the numbers . The top 20 managers’ share of the total assets increased for the fourth consecutive year, reaching 43.3%. Their AUM increased by Europe managers 18.3% to US$ 40.6 trillion. Top 20 managers also experienced the increased their fastest growth in AUM. participation in the Top 20 by one . U.S. managers dropped a member in the Top 20. The spot was member, to 8 filled by a European manager. Manager Participation is 12 U.S. to 8 Europe, with an AUM distribution of 69.8% to 30.2%. Independent . Independent asset managers made the majority (10) of the Top managers 20 ranked members followed by banks (7) and insurer-owned comprised half of the managers (3). This has remained unchanged since last year. Top 20 segment . Traditional asset classes1 of equity and fixed income continue to make up the majority of assets: 79.1% of all assets (46.5% equity, Passive investments 32.6% fixed income), experiencing an increase of 18.7% combined continues to outgrow during 2017. Active investments Equity assets grew 22% in 2017 © 2018 Willis Towers Watson. All rights reserved. 5 EXECUTIVE SUMMARY Executive summary: the backdrop . The asset management industry is facing a period of massive change and disruption resulting from the confluence of several Firms face a period global megatrends: technological, demographic, economic, of massive change environmental and social and disruption resulting from the . This is not just an investment challenge – these trends have confluence of global implications for every aspect of the asset manager’s structure: business model; operating model; people model; investment megatrends model; and distribution model Successful firms . The successful asset management firms over the next few years won’t dodge industry won’t dodge these industry realities realities . Firms must find a response to the fast-evolving challenges presented by sustainability, technology and the shift away from Culture, traditional investment models sustainability, and technology are . The importance of culture will only grow – culture will be less and among the key less a by-product and increasingly explicit and by-design issues that must be addressed © 2018 Willis Towers Watson. All rights reserved. 6 SECTION 1 Total value of assets © 2018 Willis Towers Watson. All rights reserved. 7 SECTION 1 Total value of assets managed Split by manager domicile 100,000 90,000 4,878 . AUM of the world’s top 500 80,000 4,210 managers increased by 3,759 3,508 3,608 15.6% in 2017. 70,000 3,583 . The AUM increases for 3,292 54,549 managers in Europe 60,000 3,032 3,308 (including U.K.), North America and Japan2 were 2,426 42,020 44,458 47,399 50,000 43,990 15.8%, 15.1% and 12.6% in 35,905 33,520 30,557 33,143 2017. Assets for UK US$ US$ billion 40,000 23,895 managers increased by 9.6%. 4,517 30,000 4,560 3,902 4,023 3,748 . Assets managed by firms in 4,300 4,963 4,820 4,290 5,278 the Rest of the world 20,000 category increased by 15.9% 29,884 24,075 23,987 26,340 25,950 25,095 25,806 during 2017. 10,000 22,745 22,935 21,361 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Europe (inc U.K.) Japan North America Rest of the world © 2018 Willis Towers Watson. All rights reserved. 8 SECTION 1 Total value of assets managed Split by segment 100.0% 5.2% 5.6% 5.4% 5.4% 5.2% 5.7% 6.0% 5.8% 5.9% 5.6% 80.0% 29.0% 28.8% 28.2% 33.6% 32.7% 31.5% 32.8% 31.0% 31.1% 29.5% 60.0% 23.0% 22.9% 22.5% 22.3% 22.2% 22.9% 23.2% 22.8% 21.5% 23.1% 40.0% 41.9% 42.3% 43.3% 20.0% 38.3% 40.2% 40.7% 38.7% 41.4% 41.0% 41.6% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Top 20 managers Managers 21-50 Managers 51-250 Managers 251-500 . AUM for Top 20 managers increased for the fourth year running. Their growth rate of 18.3% in 2017 was the largest of the four groups, followed by managers between 21-50, growing at 15.4%. In contrast to last year. The 251-500 bracket grew slowest of all, at 10.4%. For the second year in a row, total AUM for all segments, in dollar terms, increased in 2017. © 2018 Willis Towers Watson. All rights reserved. 9 SECTION 1 Evolution of median Assets under Management 45,000 30% 40,000 20% 35,000 30,000 10% 25,000 0% 20,000 US$ US$ billion 15,000 -10% 10,000 -20% 5,000 0 -30% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Median AUM 500 Growth Median Growth . Median assets under management for the Top 500 reached US$ 43.9 billion in 2017, up 13.9% since 2016. Over the past ten years, median AUM growth had a similar shape to the 500 growth, albeit exhibiting more extreme values. © 2018 Willis Towers Watson. All rights reserved. 10 SECTION 1 Distribution of assets by country Five year intervals (2007 to 2017, in USD) 41.59% 11.32% 7.99% 7.75% 6.37% 3.89% 3.46% 5.36% 2007 1.00% 1.76% 0.65% 0.35% 2.63% 0.79% 1.32% 1.40% 0.53% 1.85% 48.68% 7.44% 7.70% 7.88% 7.06% 4.29% 1.28% 2012 1.47% 0.30% 1.09% 3.89% 0.60% 2.21% 0.71% 2.43% 1.22% 1.17% 0.58% 53.22% 7.40% 7.71% 6.45% 4.91% 4.81% 4.00% 1.80% 2017 1.40% 0.09% 0.88% 1.17% 1.56% 0.83% 2.04% 0.48% 0.71% 0.55% . The last decade has seen an increase in the representation of managers from North America (particularly U.S.) and emerging markets such as Brazil, China and South Korea. In contrast, asset managers from Japan and some other European markets have lost market share during this period. © 2018 Willis Towers Watson. All rights reserved. 11 SECTION 1 Growth of AUM by country over 5 years Local currency (LC) and USD 21.7% China 22.4% 21.6% India 25.3% 12.1% Denmark 14.3% 11.6% Canada 16.9% 9.7% South Korea 9.7% 8.5% US 8.5% 5 year CAGR to 2017 in USD UK 6.4% 10.3% 5 year CAGR to 2017 in LC 5.5% Australia 11.7% 5.2% Sweden 10.2% 5.1% Switzerland 6.5% 3.5% Euro countries 5.6% 2.0% Brazil 12.3% -1.3% Japan 4.2% -4.8% Norway 2.8% -11.5% South Africa -4.6% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% . The increasing strength of the USD has generally had a dampening affect on the growth rate in assets recorded by asset managers in the survey. This is particularly evident in Australia, Canada, the Eurozone, Japan and emerging markets such as Brazil and South Africa. © 2018 Willis Towers Watson. All rights reserved. 12 SECTION 1 Asset participation by asset allocation1 55,000 50,000 4,280 45,000 3,581 . Equity and fixed income assets continue to dominate with a 3,404 2,820 40,000 79.1% share of AUM. 2,988 3,061 3,265 2,658 . Year-on-year AUM growth in 3,232 3,142 35,000 2,411 2017 was led by the Other 3,208 2,167 2,206 asset class, by 25.7%, closely 2,009 16,602 followed by Equities with 22%.
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